IndusInd Bank share price rallied as much as 3.56 per cent on Tuesday, March 26 after the reports circulated that the private lender is looking to appoint a search firm to look for new CEO.
IndusInd Bank stock climbed up to 3% in early trade and was trading 2.15% higher at ₹650.75 on the BSE around 9:51 AM.
Some of India’s leading executive search firms told Mint that they are actively seeking the mandate and have even been approached by senior banking officials to compete for the top position. A source familiar with the matter revealed that IndusInd Bank’s board of directors recently convened and decided to appoint a search firm this week to initiate the CEO hiring process.
According to reports, the Reserve Bank of India (RBI) has directed the bank’s board to submit a list of external candidates for selecting the next chief executive. Typically, bank boards send the list to the RBI around six months before the current CEO’s term concludes.
The search for a new CEO is driven by recent regulatory scrutiny of the private lender. It began with the RBI’s letter to IndusInd on March 6, which the bank summarized in a disclosure to stock exchanges the following day. Instead of the three-year extension requested by the board, the regulator approved only a one-year term for current CEO Sumant Kathpalia.
On March 10, the bank disclosed issues in its derivatives accounting. The private lender’s shares have declined by 6 per cent over the past five trading sessions and more than 32 per cent since the beginning of the year.
GST penalty
On Tuesday, the private sector lender revealed that the Joint Commissioner of CGST & Central Excise, Thane Commissionerate, imposed a ₹30.15 crore penalty due to various GST-related issues under Section 122(1)(ii) of the CGST Act, 2017.
“We hereby inform that a penalty of ₹30,15,18,000/- has been imposed on the Bank by the Joint Commissioner of CGST & Central Excise, Thane Commissionerate, for various GST issues. The Bank will explore filing an appeal against the order,” IndusInd Bank said in an exchange filing.
Although the specific details of the GST discrepancies were not revealed, the bank stated that it is considering legal avenues to contest the penalty.
This situation arises less than a month after IndusInd Bank identified inconsistencies in its derivatives portfolio, which could reduce its net worth by 2.35%—equivalent to nearly one-third of its nine-month net profit of ₹4,904 crore as of December 31, 2024.
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